Understanding Buy Here Pay Here RV Dealerships: A Complete Guide
Looking to purchase an RV but concerned about financing options with less-than-perfect credit? Buy here pay here RV dealerships offer an alternative path to ownership for many buyers. These establishments provide in-house financing directly to customers, often with more flexible approval requirements than traditional lenders. Before diving into this financing option, it's essential to understand how these dealerships operate, what to expect, and how to navigate potential challenges.
Buy here pay here (BHPH) RV dealerships represent a significant segment of the recreational vehicle market, catering specifically to buyers who may face challenges securing traditional financing. Unlike conventional dealerships that partner with external lenders, these businesses handle both the sale and financing internally. This integrated approach offers unique advantages and considerations for prospective RV owners who might otherwise struggle to qualify for loans through banks or credit unions.
What Are Buy Here Pay Here RV Dealerships?
Buy here pay here RV dealerships function as both seller and lender in the transaction process. When you purchase an RV from these establishments, you’re making payments directly to the dealership rather than to a third-party financial institution. This business model emerged primarily to serve customers with credit challenges, limited credit history, or other financial circumstances that might make traditional financing difficult to obtain.
These dealerships typically focus on the borrower’s income and ability to make consistent payments rather than solely on credit scores. The application process is often streamlined compared to conventional financing, with decisions frequently made on-site. Many BHPH dealerships require down payments, which can vary significantly based on the vehicle’s price and the buyer’s financial profile.
One distinctive characteristic of BHPH dealerships is their payment collection method. While traditional lenders offer various payment options, many BHPH dealers require in-person payments at regular intervals, often weekly or bi-weekly rather than monthly. Some modern BHPH operations have evolved to offer online payment options, but the frequency of payments typically remains higher than with conventional financing.
How Can I Prepare Before Visiting a Buy Here Pay Here RV Dealer?
Preparation is crucial when considering a buy here pay here RV purchase. Begin by assessing your financial situation realistically. Calculate how much you can afford for both a down payment and ongoing payments. Remember that BHPH financing often carries higher interest rates than traditional loans, so factor this into your budget calculations.
Gather all necessary documentation before your visit. This typically includes proof of identity (driver’s license or state ID), proof of income (recent pay stubs, tax returns, or bank statements), proof of residence (utility bills or lease agreement), and personal references. Having these documents organized demonstrates your seriousness and may expedite the approval process.
Research the reputation of specific BHPH dealerships in your area. Online reviews, Better Business Bureau ratings, and word-of-mouth recommendations can provide valuable insights into dealership practices and customer satisfaction. Be particularly attentive to comments about service quality, financing terms, and how the dealership handles payment issues or mechanical problems after purchase.
It’s also advisable to know your credit score before visiting. While BHPH dealers are more flexible with credit requirements, understanding your current credit situation helps you evaluate whether the terms offered are fair given your financial circumstances.
What Are Some Common Pitfalls to Avoid With Buy Here Pay Here RV Financing?
Higher interest rates represent one of the most significant drawbacks of BHPH financing. These rates can be substantially higher than those offered by traditional lenders, sometimes reaching 20% or more. Over the life of an RV loan, this difference can amount to thousands of additional dollars in interest payments.
Be wary of hidden fees that may not be immediately apparent. These can include processing fees, document fees, or service contracts that are presented as mandatory. Always request a detailed breakdown of all charges and carefully review the contract before signing. Some BHPH dealerships may also include early payment penalties that make it costly to pay off the loan ahead of schedule.
Another common concern with BHPH arrangements is the potential for aggressive repossession practices. Many BHPH contracts include terms allowing for rapid repossession after even a single missed or late payment. Some dealers may install GPS tracking devices or starter interrupt devices that can disable your RV remotely if payments are missed.
Limited vehicle selection can also be a drawback. BHPH dealerships typically maintain smaller inventories than traditional RV sellers, potentially restricting your choices in terms of models, features, and condition.
How Do Buy Here Pay Here RV Deals Compare to Traditional Financing Options?
Traditional RV financing through banks, credit unions, or manufacturer-affiliated lenders typically offers more favorable interest rates for qualified borrowers. These rates can be significantly lower than BHPH options, particularly for those with good to excellent credit scores. Traditional lenders also generally provide longer loan terms, which can result in lower monthly payments, though potentially higher total interest over the life of the loan.
BHPH financing, however, offers accessibility advantages for buyers with credit challenges. While traditional lenders might decline applications based on credit history, BHPH dealers focus more on current income stability and down payment ability. The approval process is typically faster with BHPH dealerships, often providing same-day decisions compared to the days or weeks that might be required for traditional financing approval.
Payment structures differ significantly between these options. Traditional financing usually involves monthly payments over 10-20 years for motorhomes or 5-15 years for travel trailers. BHPH arrangements frequently require weekly or bi-weekly payments over shorter terms, which can create budgeting challenges for some buyers.
What Should I Look For When Inspecting RVs at the Dealership?
Thorough inspection is essential when purchasing any RV, but particularly important at BHPH dealerships where vehicles might be older or have higher mileage. Begin with a comprehensive exterior examination, checking for signs of damage, water leaks, or repairs. Look closely at seams, windows, and roof edges where water intrusion commonly occurs. Inspect tires for age (check the DOT code), wear patterns, and damage.
Inside the RV, test all systems and appliances. This includes the plumbing system (check for leaks, test water pumps), electrical systems (lights, outlets, batteries), propane systems (stove, furnace, water heater), and any slide-out mechanisms. Operate the generator if equipped, and check the air conditioning and heating systems.
Examine the vehicle’s maintenance history if available. Regular maintenance is crucial for RVs, and documentation of service can indicate how well the vehicle has been cared for. Ask about warranty coverage, as many BHPH dealerships sell vehicles “as-is” without warranties. Consider requesting an independent inspection from a qualified RV technician before finalizing your purchase.
Comparing Buy Here Pay Here RV Financing with Traditional Options
| Financing Aspect | Buy Here Pay Here | Bank/Credit Union | Manufacturer Financing |
|---|---|---|---|
| Typical Interest Rate | 15-30% | 5-15% | 4-12% |
| Credit Requirements | Minimal | Moderate to High | Moderate to High |
| Down Payment | 10-30% | 10-20% | 0-10% with promotions |
| Payment Frequency | Weekly/Bi-weekly | Monthly | Monthly |
| Loan Term | 2-5 years | 5-15 years | 5-20 years |
| Approval Speed | Same day | 1-7 days | 1-3 days |
Prices, rates, or cost estimates mentioned in this article are based on the latest available information but may change over time. Independent research is advised before making financial decisions.
Buy here pay here RV dealerships provide a viable alternative for buyers facing credit challenges or seeking a more streamlined purchasing process. While they offer accessibility advantages, the higher costs and potentially stricter payment terms require careful consideration. By thoroughly preparing before your visit, understanding the financing structure, inspecting vehicles carefully, and comparing all available options, you can make an informed decision about whether a BHPH arrangement is the right choice for your recreational vehicle purchase. Remember that regardless of financing method, an RV represents both a significant investment and a pathway to adventure and experiences—making it worth the effort to secure the best possible terms for your situation.
